As they scour the world for the lithium, nickel and cobalt resources needed to keep China at the top of the electric vehicle (EV) share, China’s battery and electric vehicle manufacturers are worried about the supply of another mineral closer to home – graphite.
Graphite, in both natural and synthetic forms, is used for the negative terminal of a lithium-ion battery, known as the anode. About 70% of graphite comes from China and there are few viable alternatives to batteries. Chinese manufacturers have cut their jobs to keep up global demand for graphite, has grown rapidly along with the rapid growth of the battery market in recent years.
The Mind Minerals (BMI) advisory benchmark records a deficit of around 20,000 tonnes of graphite in 2022, compared with a similar surplus last year. About 20,000 tons of graphite is enough to produce batteries for about 250,000 EVs, an industry source said.
Leading global EV battery manufacturer Contemporary Amperex Technology Co Ltd (CATLOne person with knowledge of the matter said it was “desperate” to secure supplies of key components such as graphite to keep up with rising orders.
“There isn’t enough graphite on the market for domestic players to get it,” said the source, who asked not to be named because he was not authorized to speak to the media.
“Demand from customers like Tesla is growing rapidly while supplies of raw materials are extremely tight,” the source said, adding that the recent energy allocation situation for the industry has made aggravate the situation.
CATL did not respond to Reuters’ request for comment.
“SHORT SHORT SHORT”
The upcoming Winter Olympics in Beijing are set to make the supply of dark gray form carbon even tighter as authorities seek to ensure blue skies for the enticing event by ordering for energy-intensive and high-emission industries like graphite to cut output. a source from Chinese electric vehicle manufacturer NIO Inc., has knowledge of the graphite market.
“Graphite is in severe shortage and all companies are ramping up purchases,” the source said.
Graphite mines in Northeast China tend to close during the winter months due to extreme cold, leaving graphite processors with no choice but to close, said George Miller, an analyst with BMI. trying to fulfill orders from inventory.
“Graphite consumers, whether in China or abroad, are scrambling for limited resources,” he said.
BMI forecasts global demand for battery anodes will grow by an average of 27% per year over the next decade, driven by the lithium-ion sector.
According to BMI, the price of anode graphite on the Chinese domestic market is up nearly 40% year-to-date at 4,500 yuan ($707) per ton, testing a record high in 2018, according to BMI. .
Reflecting the rapid growth of the electric vehicle market, China’s auto sector sold 2.99 million electric and hybrid vehicles in the first 11 months of 2021, up 170% year-on-year.
Tesla, the world’s most valuable electric vehicle maker, has signed up in favor of a waiver of US Section 301 tariffs on man-made and natural graphite imports from China to be restored as more grades Expired tax deduction.
“Tesla has concluded that no company in the United States currently has the capacity to produce … graphite to the specifications and capacity required for Tesla’s Production“, the company said in a recent public comment to the US Trade Representative.
The first source said CATL is working on using a natural form of graphite in the battery anodes as an alternative to man-made graphite because of greater availability, although it may not give the same level of performance.
“We have heard signs that Chinese anode manufacturers are redirecting their anode mixes to a higher proportion of natural raw materials,” said Miller.
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(Reporting by Zhang Yan and Tom Daly; Editing by Gavin Maguire and Ana Nicolaci da Costa)